Response to the following problem:
Using factset calculate th intrinsic value of Microsoft using the FCF and EPS estimates out until 2021. Assume eRFR of 3 %, MRP of 7 % and assume Microsofts cost of Debt is 3 %. Note you do not have to calculate the FCF and the EPS- you are using Factset numbers. You should be able to able to find all relevant information in Factset. Assume terminal growth for FCF at $ %. Assume that 2018 FY is over- meaning use 2019,2020,2021 Fy estimates. You are valuing the stock using two methodologies. FCF and P/E. e sure to properly estimate their cash balance